Guyana explores viability of oil refinery

Jan 20, 2017 News

The US had initially ruled out building an oil refinery in Guyana, but this country’s administration is not taking chances, and feels that it may still be a good idea.

Consultant, Pedro Haas

As a result, it has retained a top oil and gas consultant to provide a high-level feasibility assessment as to whether investing in an oil refinery is a viable economic option for the country.
The approval was granted Tuesday by the Cabinet, Minister of Natural Resources Raphael Trotman disclosed yesterday.
Trotman made the announcement during the administration’s post-Cabinet press briefing at the Ministry of the President
The consultant is Pedro Haas, Director of Advisory Services, Hartree Partners LP, a US company that provides energy-related advisory services for the oil industry (upstream and downstream) to the chemical, gas and power industries.
The services of Haas were secured through the New Petroleum Production Discussion Group established by Chatham House.
The consultant is expected to provide an assessment report in four weeks, Trotman disclosed.
Facing questions, the official said that his ministry and the Ministry of Business have received multiple applications for the establishment of oil refineries in Guyana.
Trotman made it clear that it is the feeling of Government that it should not rely on its own judgment or knowledge, and therefore it went ahead to ensure that in the first instance a desktop review is done.
Among other things, Haas will be examining demand, the economics, prices, availability and forecasts. Once the report is in, some decisions will have to be made, the minister said.
There is high interest in the oil discoveries offshore Guyana within the last two years.

Curacao’s Isla oil refinery.

Confirmed is between 800,000 to 1.4B barrels of oil in the basin located more than 100 miles from Georgetown.
Some estimates, at today’s prices, put the value of the oil between US$70B-US$200B.
ExxonMobil, the US exploration company is drilling more wells to determine exactly how big of a find it is.
From the perspective of Guyana, it is one of the major developments in the history of the country, with moves to tweak legislation and prepare the technical personnel for production which could start by 2020.
The US embassy here last year had indicated that there were no immediate plans to build an oil refinery here.
US Ambassador, Perry Holloway, had disclosed that it will be largely up to Government here to create jobs.
”In terms of job creation, I want to take this opportunity to remind everyone that while this significant oil find will create jobs in Guyana, it is offshore and there are no initial plans for refining the oil in Guyana.”
The ambassador made it clear that the real significant job creations will come about from the revenue generated from the oil find.
”The government, in consultation with other key stakeholders will be able to decide in what sectors and projects the revenues are to be invested.”
According to the US Ambassador, some of the areas that Guyana can spend those oil revenues will include investing in hydro power and other forms of renewable energy; modernising of health care facilities to improve health care and keep doctors in the country; better schools and universities and infrastructure projects like a deep water port and the road to Lethem to increase trade to Brazil.
Trinidad, Venezuela and Curacao all have refineries, but they are by no means a cheap venture. Uganda, a few years ago, was thinking of building one, but the costs were in excess of US$2.5B.
It could cost Guyana upwards of US$1B.

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